Appeal of P.O.D. Docket No. 1/153 -- TIGRON DISTRIBUTORS

August 24, 1959

In the Matter of the Complaint That

TIGRON DISTRIBUTORS

906 Summit Avenue,

Jersey City 7, New Jersey,

(hereinafter called Respondent) is

engaged in conducting a scheme for

obtaining money through the mails in

violation of 39 U. S. Code,

Sections 255, 259 and 732.

P.O.D. Docket No. 1/153

INITIAL DECISION OF HEARING EXAMINER

Tigron Distributors, the Respondent in this proceeding, is a business enterprise located at 906 Summit Avenue, Jersey City 7, New Jersey. The Respondent, in the conduct of its business, sells a product called Tigron. In its sales efforts the Respondent sends through the United States mails to persons who have not previously requested it circular matter, a true copy of which is attached hereto as Appendix A. To each person who orders Tigron is sent a 30-, 60-, 90-, 180- or 360-day supply of the product depending upon the amount of the remittance specified in the order blank.

The General Counsel for the Post Office Department, the Complainant, alleged in a complaint filed on May 27, 1959, that the Respondent , in carrying on its business as outlined above, is engaged in conducting a fraudulent scheme in violation of Sections 259 and 732 of Title 39, United States Code[1] by falsely and fraudulently making the following representations:

"a. That the use of 'Tigron' as directed

will 'REACTIVATE' lost "SEX ENERGY', no matter

what age', that is to say the said product will

overcome sexual impotency in users regardless of age;

b. That by the use of 'Tigron', persons who

are 'old and played-out' will be able to 'enjoy all

the benefits of your youth once again', that is to

say the said preparation will restore full youthful

physical energy and stamina to users, regardless

of their former condition or the cause thereof;

c. That 'Tigron' will make the 'memories'

of lost youthful 'energy and sex energy' 'a

reality again' for any user;

d. That the results promised users of the

said 'Tigron' are 'positive', that is to say

certain;

e. That the said preparation contains 'the

missing vital needs' of 'any man or woman' lacking

in 'energy and sex energy', that is to say that the

ingredients in the said product are regularly missing

from, or inadequate in, the diet of such users;

f. That 'Tigron' is a most important scientific

discovery' for the treatment of the conditions for

which sold, that is to say that the ingredients in

the said product are new and their therapeutic

effects heretofore unknown to medical science;

In its answer the Respondent admits the use of the mails and it admits the use of certain advertising circulars of which Appendix A hereto is a true copy.

In view of the fact that so much of the language in the representations alleged to have been falsely and fraudulently made appear verbatim in the advertising circular, I find as a fact that the Respondent makes the representations set forth in paragraph (3) of the Complaint.

The Respondent insists that it is a tortuous interpretation of the language of the circular to say that it means that the use of Tigron as directed will cure impotency. Respondent insists that the circular refers to a "loss" of sex energy which the Respondent defines as a diminution of sex energy rather than a total lack of ability to engage in the sex act.

It seems to me that the Respondent is cutting his shades of meaning a mite too thin. When one experiences a loss of something, he is without it, he is deprived of the use and benefit of it. I believe, and I find, that the average reader possessed of the ordinary mind would conclude from reading Respondent's circular that Tigron, if used as directed, would restore sexual power to those persons who are impotent as well as to those persons whose sexual powers have decreased or diminished. In interpreting the advertising literature of the Respondent it is the effect upon the mind of the ordinary reader that is controlling. (Donaldson v. Read Magazine, 333 U. S. - 178)

Respondent denies that the representations, if made, are false. In this connection, Respondent asserts that the testimony adduced by the Complainant is not of sufficient competency to sustain the charge that the representations are false. Without in any way indicating agreement with this assertion by the Respondent, let us look at the testimony and exhibits introduced and relied upon by the Respondent.

The sole witness for the Respondent was Dr. Frederick B. Bohensky, a well qualified doctor of medicine. Dr. Bohensky testified that of the cases of impotency approximately 80-85 per cent are caused by psychic factors and 15-20 per cent are due to organic conditions. With respect to a diminution of sexual vigor, psychic and organic factors account for about 50 per cent, each, of the cases. (Tr. 154, 155). These percentages obtain even though there are many more people who suffer a diminution of sexual energy than there are people who are impotent. In neither instance would a person whose condition is caused by psychic factors derive any benefit from the Respondent's product.

Confining attention to an assumed 100 persons with decreased vigor and decreased sexual capacity, their conditions would result from the following causations in approximately the number indicated:

Persons with psychic problems 50

Persons with serious organic

diseases such as diabetes 15

Persons who are periodic heavy

Drinkers 15

Persons with dental problems 5

Persons who are vegetarians 5 or 6 (assume 5)

-------------------------------------------------------------------------------------------------------

Total 90

From the tabulation, it is apparent that there would be roughly only ten per cent of the persons to whom the Respondent claims the advertising material is addressed who would be aided by the Respondent's product - and the Respondent's medical expert testified on direct- and on cross-examination that the Respondent's product would be beneficial to those persons only if given as a supplement to a proper diet.

(Tr. 120, 131)

In diametric opposition to this testimony by the Respondent's witness are statements by the Respondent. In Appendix A, the Respondent assures that "All you do is simply take one small pleasant tasting tablet before retiring - and that's ALL you do - Tigron does the rest." On the outside of the carton in which the ordered pills were received is the following legend:

"D O S A G E

One tablet with water before retiring each night."

In the face of this irreconcilable conflict, no conclusion is possible except that the advertising representations made by the Respondent are false.

There was a conflict in the medical testimony as to the number of grams of essential amino acids which are found in the average daily diet of persons in this country and as to the number of grams actually required by the average person. This matter is of no consequence, however, since the issues did not involve these questions but, rather, the value and efficacy of the Respondent's pills to persons who do not ingest a sufficient quantity of these amino acids. Even so, the evidence of record in this proceeding on the question as to the daily intake and daily requirements preponderates on the side of the Complainant, but I repeat that this is a proposition which I am not required to, and do not, decide.

The expert witnesses produced by the Complainant were well qualified and highly competent in the fields of their specialties, and the testimony of all the experts is much more notable for its points of agreement than its points of difference.

Post Office Inspector William J. Hegarty investigated this case and during the course of his testimony at the hearing Mr. Hegarty stated that he interviewed the owner of the enterprise, Mr. Irwin N. Greene. Mr. Greene, who did not attend the hearing in person, told Mr. Hegarty that he had attended Tulane University and that he "majored in R.O.T.C." He stated that he has about $15,000 invested in this business to the date of the interview, that no doctors are associated with him, and that he is the sole owner of the enterprise. Mr. Greene said that he obtains his pills from a manufacturing pharmaceutical firm located in New York City. Mr. Greene has had no medical training or experience, and, in response to a question as to whether he had obtained medical opinion about the product or had it tested, he stated that he had not had any tests made and the he had not obtained any formal medical opinion with respect to it. Mr. Greene did say that he had informally asked certain doctors who were either relatives or friends of the family about Tigron and these doctors said that it was a good product - that it might help some people.

In spite of the fact that Mr. Greene had no education or experience in medicine - either generally or in the specific field into which he was entering - and despite the fact that he had received only the most shockingly meager and generalized medical advice (properly categorized as adverse), nevertheless Mr. Greene launched himself into the business of offering for sale a product which he said would restore sexual vigor to persons who are impotent and to those whose sexual powers are decreased.

As the Supreme Court said in Roth v. United States, 354 U. S. 476, 407:

"Sex, a great and mysterious motive force

in human life, has indisputably been a subject

of absorbing interest through the ages; it is

one of the vital problems of human interest

and public concern."

Since the general subject of sex has been recognized as being a topic of such wide interest, how much more intense is the interest of the person whose individual powers in this regard are waning or are non-existent! Not only is the individual's physical life affected, but his pride, vanity, ego and his entire outlook are inextricably intertwined with this problem. Because of the reticence of most persons to discuss matters of this kind even with their physicians (Dr. Bohensky, Tr. 157), it would be most natural for them to request that there be sent to them through the mails "in plain wrapper" (App. A. order blank) a product which they are assured in such glowing and positive terms will restore their youthful vigor and sexual vitality. It is obvious, therefore, that if a person is to enter the field chosen by the Respondent he owes a far greater than average duty to his customers to carefully investigate the efficacy of his product and honestly and accurately to represent it.

This thought which I have been trying to express has been enunciated in several cases.

"[7, 8] Courts take judicial notice of facts of common notoriety and within judicial knowledge, relating to the health, natural habits and propensities of man. See Safeway Stores v. Dunnell, 9 Cir., 1949, 172 F.2d 649 653; cf. Ohio Bell Tel. Co. v. Public Utilities Comm., 1937, 301 U.S. 292, 300-302, 57 S.Ct. 724, 81 L.Ed. 1093; Shapleigh v. Mier, 1937, 299 U.S. 468, 475, 57 S.Ct. 261, 81 L.Ed. 355. Nature demands that judicial notice be taken of the inescapable fact that there inevitably comes an age and condition in man when both action and reaction of involuntary muscles slow and sometimes fail, as surely as with voluntary muscles, See: Southern Pac. Co. v. Guthrie, 9 Cir., 1950, 180 F.2d 295, 303. Bacon expressed this truth more than three centuries ago by admonishing that we 'Discern of the coming on of years, and think not to do the same things still, for age will not be defied.' [Francis Bacon, Essays, XXX (1625).]

[9] It is appropriate moreover to notice judicially that there is probably no subject matter more highly deflating to masculine ego, and hence more highly calculated to arouse instant male scorn and prejudice, than the problem raised in plaintiff's advertising circular. Whether such masculine propensity to scorn and prejudice increases or decreases with age may be open to debate. So with the question whether the increase or decrease varies in mathematical or geometrical progression or retrogression."
(Jeffries v. Olesen, 121 F. Supp. 463, 471-2)

"That modesty, or prudery, or whatever else it may be called, which puts a ban on frank and unrestricted reference to human sexual parts, and enfolds their mention and consideration in secrecy and shame, has given quacks and charlatans a most fruitful field for operation, of which they have not been slow to take advantage. Sometimes boldly, but often by suggestion and innuendo, they undertake to make all men believe they have symptoms of most serious sexual disorders, when, in truth, they are more often perfectly normal, and that the natural subsidence of virility (which is generally quite as certain as the flight of years) will be arrested, and the victim restored to the vigor of robust youth, and that all sexual troubles will be corrected, if only that particular nostrum betaken, or that plan persistently followed. He who would operate in this peculiar field of endeavor must have a special care that his scheme is not calculated to instill in men unfounded fears, or inspire in them false hopes, as a means to the end of obtaining their money." (Leach v. Carlile 267 F. 61, 64, affirmed 258 U.Sl. 138)

Respondent attempts to justify itself by saying that it does not promise the beneficial effects to all users of its product. The short answer to any such flimsy protestations by the Respondent is that neither does it state that the beneficial effects would be derived by only a very limited few - and by these only if they are concurrently on a high protein diet.

Concerning the representation that Tigron is a most important scientific discovery, Respondent points out in its brief that the complete statement commences with the words "In our opinion". This statement in the brief is true, but it is equally true that underneath the representation that the product is an important scientific discovery in large black type is this guarantee - "COMPLETE RESULTS GUARANTEED WITHIN 10 DAYS OR YOUR MONEY BACK IN FULL". This guarantee lends added force to the "opinion" of the Respondent. As stated in Donaldson v. Read Magazine, 333 U. S. 178, 188-9:

"Advertisements as a whole may be completely

misleading although every sentence separately

considered is literally true. This may be because

advertisements are composed or purposefully printed

in such way as to mislead. Wiser v. Lawler, 189

U. S. 260, 264; Farley v. Simmons, 99 F.2d 343,

346; see also cases collected in 6 Eng. Rul. Cas.

129-131. That exceptionally acute and sophisticated

readers might have been able by penetrating

analysis to have deciphered the true nature of

the contest's terms is not sufficient to bar find-

ings of fraud by a fact-finding tribunal. Questions

of fraud may be determined in the light of the effect

advertisements would most probably produce on ordinary

minds. Durland v. United States, 161 U. S. 306-313,

314; Wiser v. Lawler, supra at 264; Oesting v. United

States, 234 F. 304, 307. People have a right to

Assume that fraudulent advertising traps will not

be laid to ensnare them. 'Laws are made to protect

the trusting as well as the suspicious.' Federal

Trade Comm'n v. Standard Education Society, 302 U. S.

112, 116."

Respondent next urges that the cases of U. S. Nature Products Corp. v. Schaffer, 125 Fed. Supp. 375; Reilly v. Pinkus, 338 U. S. 269; and Jarvis v. Shakleton Inhaler Co., 136 F. (2d) 116 preclude any finding of fraudulent intent in this proceeding.

The Respondent takes the position that the money-back guarantee negates any idea of fraudulent intent on its part. Respondent relies on the Jarvis case, in which it was held that based on the facts there involved, a refund offer supported a holding that there was a lack of fraudulent intent. Jarvis did not by any means establish a rule that any claims, regardless of how blatantly false they might be, could be made so long as they are accompanied by an offer to refund the purchase price for the article offered for sale. In Harris v. Rosenberger, 145 F. 449, 455, it is said:

"The falsity of the representations and the

appellee's knowledge of their falsity being

established, as they were, it was not an inadmis-

sible view that the promise to refund the purchase

price, if the goods were not satisfactory and

were returned, were clearly devised to give apparent

color and support to the representations. True, it

appeared that, in a few exceptional instances where

customers discovered and resented the deceit which

was practiced upon them, the appellee refunded the

purchase price in fulfillment of his promise, but

it cannot be said that this necessarily or conclu-

sively disapproved any intent to defraud, particularly

when it was not questioned that in all other instances

he retained this money obtained by means of the

deceit which he was practicing."

The Court in G. J. Howard v. Cassidy, 162 F. Suppl. 568, 572-3 held on this point:

The plaintiff contends that the refund

guarantee contained in the advertisement is in and

of itself sufficient to refute the claim that a

purpose or intent to deceive existed. Such a

guarantee does not necessarily disprove an intent

to defraud, Harris v. Rosenberger, 8 Cir., 1906,

145 F. 449, 445, 13 L.R.A., N.S., 762, certiorari

denied 1906, 203 U.S. 591, 27 S.Ct. 778, 51 L.Ed.

331; Farley v. Heininger, 1939, 70 App.D.C. 200

105 F.2d 79, 84, certiorari denied 1939, 308, U.S.

587, 60 S.Ct. 110, 84 L.Ed. 491; and Jeffries v.

Olesen, D.C.S.C.Cal. 1954, 121 F. Supp. 463, relied

upon by plaintiff, does not hold to the contrary,

for there the guarantee was regarded as merely

evidencing a lack of fraudulent purpose. In the

instant case it was correct for the Post Office

Department to find that the plaintiff could not

'erase the illegal taint of its conduct by its

'money back' guarantee'."

Finally, Judge Kaufman in his decision in Borg-Johnson Electronics, Inc. v. Christenberry, Civ. No. 138-357, U.S.D.C., S. D. N. Y. (January 19, 1959) held that a promise to refund the purchase price should the article prove unsatisfactory would not necessarily preclude a finding that a fraudulent scheme was being conducted when it appears that an advertiser deliberately induces its patrons to purchase its product in the belief that the value of the product far exceeds its true worth.

These cases provide ample authority for the conclusion that if other factors indicate the existence of a fraudulent scheme the offer to make a refund does not necessarily negate the existence of such a scheme.

At the hearing the Respondent used certain documents in the cross-examination of the Complainant's witnesses. Counsel for the Respondent predicates certain arguments in his brief on statements made in these documents, which were received in evidence as Respondent's Exhibits 1 through 10.

I have read these articles, bulletins and pamphlets and I have prepared a digest of them which is attached hereto as Appendix B. Some of these articles are not even remotely related to the issues in this case. Furthermore, I find that Respondent's brief has in it isolated sentences and paragraphs which, when taken out of their contexts as they are in Respondent's brief, convey an entirely different meaning than when the material is considered in its entirety. Most of these articles recognize the possibility that in the United States some children, some pregnant and lactating women and some elderly persons may be on a protein-deficient diet. Is the Respondent actually trying to increase the sexual vigor of children? If the women involved are pregnant and lactating, is that not some evidence of their sexual adequacy? As for elderly people, depending upon the degree of their elderliness and their physical preservation, sexual vigor is a matter of relatively minor concern with them, and the articles clearly indicate that their inanition is caused largely by psychic, environmental, social and economic factors or by the diseases which are the concomitants of advancing years. In every case, the indicated treatment is the treatment of the whole person including, where possible, all of the aforementioned contributing factors. If the Respondent's position is that for these three classes of persons it is the general vitality and well-being of the persons that will be aided by his pills, the documents bear out the testimony of the three experts that proper, individualized diet is an absolute essential.

We thus find that the Respondent's expert witness testified (as did all the expert witnesses) that the Respondent's product if taken alone is worthless (Tr. 132). We find that the medical articles, pamphlets and bulletins relied on by the Respondent are in complete agreement with this oral testimony. The Respondent clearly is bound by all of this evidence and this evidence supports the view that the universality of informed scientific and medical belief is contrary to the claims made for his pills by the Respondent. Some, if not all, of the witnesses at the hearing testified that their views in this regard represent and are in accord with the universality of informed medical and scientific belief.

It is true that Mr. Greene made an inquiry of one or more doctors who are either his friends or his relatives, but from this record it is clear that the inquiry was only of the most casual and general sort. In addition, the replies received to his inquiry were meaningless in view of the Respondent's belief that his product was a "vitamin". (Tr. 18)

In Leach v. Carille, supra, in which Leach was engaged in the sale of a product which was supposed to produce results similar to those claimed by this Respondent for his pills, the Court said:

"In this particular field, with its narrow

limitations, and its possibilities at best involved

in uncertainty and doubt. There would be manifest

difficult in preparing advertising matter which

avoids grossly extravagant and unwarranted

representations. But this very difficulty, far

from justifying such departures, would impose on

those who glean in it, and would extract profit

out of the exploitation of such articles, special

care to see that what is so put forth is not

calculated to deceive and defraud the public."

Concerning intent to deceive, it was said by the court in Gottlieb v. Schaffer, 141 F. Supp. 7, 17 that:

"An intent to deceive is rarely capable of

direct proof, since this involves what is in

a man's mind. It is hornbook law that this

subjective element may be established by

circumstantial evidence. It is not any single

element segregated from the whole by which the

determination is to be made but from the totality

of all the acts, conduct and surrounding circum-

stances and the inferences which may reasonably

be drawn from a combination of acts and circumstances.

The type of publication in which the advertise-

ments were inserted with their obvious appeal

to a susceptible and easily influenced group,

the nature of the advertisements, their combina-

tion and use in connection with other advertising

media issued by the plaintiff, the focus of the

advertising campaign, are all relevant on the issue."

As stated in Reilly v. Pinkus, 338 U. S. 279, 276:

"Consequently fraud under the mail statutes

is not established merely by proving that an in-

correct statement was made. An intent to deceive

might be inferred from the universality of scientific

belief that advertising representations are wholly

unsupportable ***."

Furthermore, where, as in the present case, the owner of the Respondent had no reasonable basis for believing his advertising representations to be true, the making the representations constitutes such a reckless disregard of what the truth might be as to amount to be a fraudulent intent. (Corliss v. U.S., 7 F 2d 455; U. S. v. Pike, 158 F. 2d 46; Darnell v. Darnell, 200 F. 2d 747) As stated in Borge-Johnson Electronics, Inc. v. Christenberry, supra:

"When it appears that an advertiser deliber-

ately induces its patrons to purchase its product

in the belief that its value far exceeds its true

worth it is sufficient to support a finding that

a fraudulent scheme was being conducted. Leach v.

Carille, 258 U. S. 138 (1922). This is so, even

Where there is a promise to refund the purchase

Price should the article sold prove unsatisfactory.

Farley v. Heininger, 105 F. 2d 79, 84 (C.A.D.C.),

cert. denied 308 U.S. 587 (1939)."

Upon the basis of the record in this case, I make the following finds of fact, and conclusion of law.

FINDINGS OF FACT

1. The Respondent is engaged in the sale through the mails of a product called Tigron.

2. In the sale of this product the Respondent distributes through the mails an advertising circular of which Appendix A to this Initial Decision is a true copy.

3. In this advertising circular the Respondent makes the representations set forth in paragraph 3 of the complaint in this proceeding.

4. The representations made by the Respondent are false.

5. The representations made by the Respondent are fraudulent, that is to say that they are made with an intent to deceive.

CONCLUSION OF LAW

The respondent is engaged in conducting a scheme for obtaining money through the mails by means of false and fraudulent pretences, representations and promises in violation of Sections 259 and 732 of Title 39, United States Code.

On brief, the Respondent argues that "the Post Office Department's rules of practice, procedure and organization under which the instant fraud order (s9c) was issued, are void, in that they violate the provisions of the Administrative Procedure Act." Under this general statement, the Respondent argues three points, as follows:

A. The Judicial Officer cannot render the final agency decision.

B. The rules have not been properly set forth and published.

C. The purported redelegation to the Judicial Officer of the Postmaster General's decision-making power is illegal.

Points A and C are without merit. (Borg-Johnson Electronics, Inc. v. Christenberry. supra; Rev. Merle E. Parker v. Summerfield, U.S.C.A., D.C., No. 14, 530, March 19, 1959; United States Bio-Genics Corp. v. Christenberry, U.S.D.C., S.D.N.Y., Civil 140-241, June 2, 1959).

Point B is without merit. The rules under which this proceeding was brought were published in the Federal Register on April 26, 1958 (23 F.R. 2794), and they were amended on May 30, 1958 (23 F. R. 3775). The complaint in this case was not filed until May 27, 1959.

In addition to the matters set forth above, I incorporate by reference as fully as if set forth herein in toto, the matters stated by me at pages 6 and 7 of the transcript of the hearing in this case, and my remarks concerning the validity of the procedures of this Department appearing at pages 20 through 25 of my Initial Decision, dated March 16, 1959, in the Medical Facts case, reversed on other grounds by the Judicial Officer under date of June 24, 1959. (P.O.D. Docket No. 1/74)

Proposed findings of fact and conclusions of law not discussed specifically herein have been considered and are denied as being without merit.

There is attached hereto for execution by the Judicial Officer the appropriate order for the suppression of the fraudulent enterprise.

William A. Duvall

Hearing Examiner

[1] The Complaint originally charged the Respondent with operating his business under an assumed name, but this question was disposed of and there was no issue presented in this proceeding related to the ownership of the business.